Herb Allison, TARP Overlord, Steps Down

Herb Allison, the Assistant Secretary of the Treasury for Financial Stability, is stepping down from his position. His job was to manage the Troubled Asset Relief Program, or TARP, more colloquially known as the “huge bank bailout from 2008.”

Allison said he’s going back to Connecticut to be with his wife, who couldn’t join him in D.C. In an email to colleagues obtained by The Wall Street Journal, Allison said, “With the TARP program entering a new phase and continuing to wind down, I have decided that now it is the right time for me to step down.”

Treasury Secretary Tim Geithner says that Tim Massad, chief counsel and chief reporting officer for the Office of Financial Stability, will be replacing Allison on an interim basis.

Tim Geithner today said that TARP, initially a $700 billion investment designed to stabilize the financial system, may “only” wind up costing the government $66 billion. The Treasury Department announced today that it expects to make $700 million of warrants to purchase shares of Hartford Financial Services. The government had gotten those shares as part of the agreement to front Hartford $3.4 billion in capital as part of the TARP bailout.